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Berkadia®, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is an industry leading commercial real estate company providing comprehensive capital solutions and investment sales advisory and research services for multifamily and commercial properties. Berkadia® is amongst the largest, highest rated and most respected primary, master and special servicers in the industry. This advertisement is not intended to solicit commercial mortgage company business in Nevada.
© 2024 Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Berkadia® and Berkadia Commercial Mortgage® are trademarks of Berkadia Commercial Mortgage LLC. Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. Tax credit syndication business is conducted exclusively by Berkadia Affordable Tax Credit Solutions. For state licensing details for the above entities, visit www.berkadia.com/licensing.
DREW WHITE
Senior Managing Director 202.294.6976 drew.white@berkadia.com
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LIHTC REGULATORY COMPLIANCE TERMS
Compliance Period: Buildings placed into service between October 2003 to May 2005. The Initial Compliance Period ended December 2019.
INCOME RENT RESTRICTION: 100% of the units are subject to income limitations at 60%.
RENT RESTRICTIONS: 100% of the units are rent restricted at 50% of AMI.
Extended Use Period: Extended use period ends December 2054 (35 years after the close of the Compliance Period) plus an additional 3 year tail period.
The Asset
The Opportunity
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Note: Rents may change as the data is from the BOV.
3.11% INTEREST ONLY ASSUMABLE FINANCING | Charming Portsmouth VA Location
2500 Oak Leaf Place, Portsmouth, VA 23707
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Phase
Phase I
Phase II
Total/Avg
Type
Year Built
Year Renovated
# Stories
# Units
Avg. Unit Size
In-Place Rent/Unit
In-Place Rent/SF
Rent W/O Voucher
Rent W/O Voucher/SF
Occupancy (2/7/24)
Townhomes & Flats
1966
2004
Three 2-Story Buildings
48
675
$956
$1.42
$908
$1.34
97.9%
Garden
2005
N/A
Six 3-Story Buildings
132
1,191
$1,123
$0.94
$1,054
$0.88
95.5%
1995
180
1,053
$1,078
$1.02
$1,015
$0.96
96.1%
Portsmouth’s Best Kept Secret
2500 Oak Leaf Place, Portsmouth, VA 23707
Executive Summary
The Berkadia Investment Sales team is pleased to present the fee simple interest sale of Whispering Oaks (the “Property”), a 180-unit Class B affordable multifamily property located in Hampton Roads’ charming Portsmouth submarket.
Whispering Oaks is a Low-Income Housing Tax Credit property, with extended use affordability restrictions that are due to expire in December 2054, with an additional 3-year tail period thereafter.
Whispering Oaks benefits from being immediately surrounded by the region’s most critical economic drivers which includes the nearby Bon Secours Maryview Medical Center (1,300 jobs), the highly acclaimed Naval Medical Center (4,300 jobs) in Portsmouth, Norfolk Naval Shipyard (12,000 military and civilian personnel), Naval Station Norfolk (over 82,000 active duty military on base and over 29,000 civilians), among other critically important economic drivers.
The region as a whole is anchored by strong healthcare, tech, military and tourism industry presences, and the sheer magnitude of the various military installations throughout the region provides a floor in theform of a constant supply of renters. The Hampton Roads region has been booming over the past several years as military spending continues to increase. Defense spending in the region is projected to increase to $28 billion in 2024, poising the region for continued acceleration in both rent growth and occupancy. Consequently, over the past 5 years, AMI growth in Hampton Roads has averaged 6.1% annually, positively impacting affordable rent growth trends.
Current ownership’s excellent stewardship of the Property, coupled with strong historical occupancy, positions this as one of Hampton Roads’ most compelling multifamily opportunities. The Property is encumbered with assumable favorable in-place debt.
HIGH DEMAND FOR AFFORDABLE PRODUCT
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While federal programs, such as the Low-Income Housing Tax Credit (LIHTC), have helped create and preserve some affordable housing units, the need for affordable housing far outstrips the available supply. As a LIHTC property, Whispering Oaks competes in a multifamily class that is always in extremely high demand and in low supply, fueling the Property’s consistently high occupancy and attractiveness.
HOUSING AFFORDABILITY, MSA GAP ANALYSIS: The National Low-Income Housing Coalition’s 2021 edition of “The Gap” indicates that across Virginia, there are only 55 available, affordable homes for every 100 renter households earning less than 50% of AMI.
WIDENING AFFORDABLE RENTAL SHORTFALL: Recent research by Freddie Mac notes that the already acute shortfall of affordable rental apartments has widened “considerably” over the past several years. Previous Freddie Mac research found rising costs of land and construction has also widened the supply gap, demonstrating a growing need for additional affordable housing inventory.
PROPERTY STORY POINTS
Clubhouse with Resident Lounge
Swimming Pool
Fitness Center
Children’s Tot Lot
Community Room
Virtual Moving Concierge (complimentary address change, set-up of home services, and digital moving announcements)
Clothes Care Center
Pond
10 Minutes to Downtown Portsmouth
8 Foot Ceilings Throughout
Wall-to-Wall Carpeting in Living Areas & Bedrooms
LVT Flooring (select units)
White-on-White Appliances
Laminate Countertops
Two-Level Townhouse Units (20 Units)
Washer/Dryer Connections (Option to Lease W/D)
Spacious Closets
Patio/Balcony
Wheelchair-Accessible Rooms (select units)
COMMUNITY AMENITIES
UNIT AMENITIES
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AMENITIES
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2500 Oak Leaf Place, Portsmouth, VA 23707
Capital Stewardship
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Since 2018, ownership has invested $1,046,000 into the Property via key upgrades that includes: new roofs on townhomes (2023), drainage improvements, site lighting upgrades, seal coat and striping, and interior unit upgrades (vinyl flooring and HVAC upgrades).
AMI Rent Growth Fueling Consistent Affordable Rent Growth
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Over the past five years, the four-person AMI has averaged annual growth of 6.1%, directly impacting the calculation of Max Rents for affordable product. Based on Census data, the rent and income limits are projected to grow by 1.6% in 2024.
Increased Voucher Standards and Subsidy Gain-to-Lease
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As of the 2/7/24, there are 29 units operating above the projected 2024 maximum allowable rent due to those tenants having a PRHA subsidy voucher, resulting in $111,456 of additional income.
CARTER WOOD
Senior Director
804.350.2109 carter.wood@berkadia.com
BRANDON GRISHAM
Senior Managing Director 253.653.3313 brandon.grisham@berkadia.com
COLE CARNS
Director
804.878.1258 cole.carns@berkadia.com
JORDAN SKYLES
Director
208.631.4981 jordan.skyles@berkadia.com
ADAM TOMBERG
Director206.521.7218adam.tomberg@berkadia.com
AUSTYN HAZEN
Associate Operations Director 208.296-2072 austyn.hazen@berkadia.com
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Highly Accretive In-Place Financing
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Assumable in-place Fannie Mae loan with a 3.11% fixed interest rate and full-term I/O with a maturity of 04/01/31. Investors will also be able to take advantage of a co-terminus supplemental loan that would increase proceeds by $2,735,000, resulting in a blended all-in rate of 3.96%.
ADAM TOMBERG
Director206.521.7218adam.tomberg@berkadia.com